Question: a firm produces electricity from a coal fired furnace with...
A firm produces electricity from a coal fired furnace with marginal cost function of MC= 4+2q, where q is the amount of electricity produced. There are adverse health and environmental costs from burning coal. you do a study and find that each unit of electricity produced form coal leads to $1 worth of heath costs to society and $.50 of other environmental costs to society.
a) what is the formal for marginal private cost?
b)what is the formula for marginal external cost?
c) what is the formula for marginal social cost?
d) is the firm produces 10 units of electricity what is the total social cost?